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Bitcoin de-risking might cost the investors in a different way, and probably they are unaware of it
In 2021, Bitcoin exploded exponentially. Back then, it seemed as if cryptocurrency investors are going to be the next millionaires. It was a time when investors had to rebalance their portfolios and sank deep into cryptocurrency investments. But by the end of 2021, the crypto market sank, taking investors and crypto businesses down with it. After that, major crypto whales started selling their crypto investments enabling an untimely sell-off season. In fact, the crypto market has declined so much that this week marked the all-time lows of Bitcoin and some of the other major cryptocurrencies in the market. Bitcoin has been a hot topic in the financial and economic markets. Not just for its extreme vulnerability, but also due to the various controversies regarding the fact that it’s taking down the entire crypto market with it, and has minor potential in the future. Recently, Bitcoin has also been under the spotlight due to its technical issues. The BTC token price fell by almost 25% in the month of May, which indicates a 55% decline from its all-time highs in November 2021. So, existing Bitcoin users are urgently putting their investments into exchanges to de-risk their investments and protect their positions in the market.
The number of transactions on the Bitcoin network increased considerably over the past week. Crypto analysts state that these are most likely urgent transactions due to the high amount of fees paid per transaction. According to Cointelegraph, the average fee rose up to US$2.72 last week, which is almost 15% higher than the typical average. Glassnode stated that investors will pay higher than average fees to prioritize and are likely to pay higher-than-average fees to direct their bids and de-risk their portfolios. Bitcoin transactions exceeded inflows more in the past few weeks than they did in Q1 of 2022. This demonstrates that investors seem quite desperate to regain their past profits, and most importantly, secure their position in the market.
Will the Bitcoin price recover?
Well, this is a million-dollar question right now! The stock market is quite closely following the traditional stock market, which is one of the many reasons why Bitcoin along with the entire crypto market is falling. But recently, the stock market seemed to stabilize after tumultuous conditions. Also, inflation is heavily rising in the US and all across the globe. Well, in a nutshell, investors are under major uncertainties which are plaguing their sentiments. Well, currently, it does seem like the Bitcoin price will definitely rise, given investors are desperately trying to save their investments. But currently, it is declining at a fast pace, and investors should be careful before diving deep into the market. If the Bitcoin ‘Death Cross’ threats are real, then BTC buyers should brace themselves for a prolonged and heavy loss.